Bankruptcy For Seniors: How To Cope
Given the opportunity to live longer, most would not hesitate. Medical advances that result in longer lives, however, come with a price tag. Some older adults are finding medical costs taking up more and more of their income and some of them are now on fixed incomes. Medical bills, though, are just the beginning of financial troubles for senior citizens who are dealing with rising housing, food, fuel, and utility costs as well. Read on and find out how older people are coping with their financial situation by declaring bankruptcy.
Using Bankruptcy Exemptions Wisely
When you can no longer afford to live on your income given your debt load, chapter 7 bankruptcy might provide some welcome relief. It might also, however, come with a loss of property at a time when you may not want to start all over again. Bankruptcy exemptions exist to keep filers from being destitute and without assets even when they do have to file for debt relief. Exemptions vary widely from state to state so the help you get from them varies, too.
Real Estate Exemptions
Known as homestead exemptions, these exemptions are meant to help filers keep their primary residence safe from seizure by the bankruptcy trustee. Seniors have often worked long and hard to keep their homes throughout the years, and this issue can keep some from filing for fear of being homeless. Several scenarios are possible depending on the state you live in, the value of your home, and whether or not you are behind on your mortgage.
If your home is paid off and many seniors take pride in that achievement, the chances of losing your home depend on your state's exemptions. Some states exempt a home of any value, no matter what. Most states, however, provide filers with a certain sum of money as an exemption. As long as the value doesn't exceed the exemption, your home is probably safe.
If you have a mortgage but are behind on the payments, you could lose your home to foreclosure regardless of a bankruptcy filing. You can stop foreclosure actions for a short time by filing for chapter 7, but you will need to work things out with your lender to avoid foreclosure. If you have a mortgage and still owe a lot of money, the bankruptcy trustee may not be interested in it due to having to satisfy the large mortgage to get any value from it.
A lot goes into the equation when it comes to keeping your home with a chapter 7 filing. Gather your financial paperwork and speak to a bankruptcy lawyer to find out how to get the debt relief you need and still keep your home.